The Path to API Monetization Doesn't Have to Be Painful
Complexities and challenges exist, but with the right approach, developers and organizations can have their API monetization cake — and eat it, too
April 10, 2023

Ahmad Awais

The digital world moves incredibly fast. Embracing APIs as a key strategy for optimizing internal software development was big news not too long ago. Now, it's all about external-facing APIs and the quest for monetization.

Companies quickly realized that the APIs their in-house developers build to solve internal challenges would likely have value for developers in other organizations as well — and the path to monetization became clear. Today, businesses across all industries are creating new revenue streams by extending their products and services via API-enabled partnerships. And, independent developers are getting in on the game as well, building APIs specifically for revenue-generation purposes.

The Monetization Trend

According to the 2022 State of APIs Report, an increasing number of organizations are embracing the idea of monetization. Overall, API monetization in 2022 increased 5% from previous years. Within the financial sector, it rose by 16%. 

The benefits for organizations are clear:

Revenue potential: Monetizing APIs enables companies to drive additional revenue.

Engagement and loyalty: By monetizing APIs, organizations can encourage customers to use their API to build new applications and services, which can lead to increased engagement and customer loyalty. 

Partnerships: API monetization can create opportunities for businesses to form partnerships with other companies and third parties. 

Competitive advantage: By adding revenue and increasing engagement and partnership opportunities, companies can gain competitive advantage.

Why It Matters for Developers

Developers are interested in API monetization, too, for a variety of reasons. Independent developers are embracing API monetization as a pure-play earnings opportunity.

Within organizations, developers are keen to monetize their own APIs because it provides their companies an opportunity to increase revenue and support further development and growth. Monetization across the industry also makes a wider range of APIs available for developer use, thus enabling them to build new applications and services that leverage existing data, services, or functionality — instead of having to build everything from scratch.

What to Expect Along the Way

Regardless of where a company or developer is along the path to monetization, there are some key considerations, and making monetization part of an API management approach requires effective planning and strategies. 

Some of the questions companies and developers should ask themselves include: 

■ Where will I sell my APIs?

■ What tools do I need on the backend to process API transactions?

■ How will I communicate with my API users?

■ What documentation do I need to provide about my API?

■ Do I have to worry about governance and usage issues?

■ How will I ensure brand consistency across my API offerings?

■ How do I handle ongoing API support and maintenance?

■ Will developing these capabilities to support API monetization slow down time to market for my APIs?

The complexity around API monetization is real. Companies cannot jump into the monetization game without first preparing their marketplace and back-end platforms to handle — and, hopefully, scale — API purchases and transactions.

Many organizations are opting to use pre-existing API hubs over building their own capabilities for these reasons. Choosing a ready-made digital API storefront can save organizations valuable time in getting to market with their APIs. This approach also frees developers from being involved in logistical concerns around monetization and instead enables them to focus on optimizing the quality of the APIs and the infrastructure supporting them.

When evaluating where to park your API monetization program, these functionalities should be top priorities:

■ Quick and efficient onboarding process

■ Flexible, customizable, easy-to-use hub for sharing and monetizing APIs

■ Support for all API protocols and API types

■ Flexible, tiered pricing models

■ Full ownership of the payment process

■ Branding capabilities

■ Governance and linting features

Making the Move Effectively

Developers and businesses planning to embark on monetization can do so effectively as long as they plan in advance and pick smart tools. Whether the priority for the organization is to boost revenue, forge greater engagement with the developer community or increase third-party partnership opportunities, the overall API monetization effort is key.

It's essential to create or select a centralized API hub that enables monetization with speedy time to market as well as full capabilities for supporting API transactions, documentation, communication, usage issues, and brand identity.

This comprehensive and holistic approach will pay dividends, as the emphasis on achieving competitive advantage through API monetization will only continue to grow.

Ahmad Awais is VP of Developer Relations at Rapid
Share this

Industry News

September 28, 2023

Kong announced Kong Konnect Dedicated Cloud Gateways, the simplest and most cost-effective way to run Kong Gateways in the cloud fully managed as a service and on enterprise dedicated infrastructure.

September 28, 2023

Sisense unveiled the public preview of Compose SDK for Fusion.

September 28, 2023

Cloudflare announced Hyperdrive to make every local database global. Now developers can easily build globally distributed applications on Cloudflare Workers, the serverless developer platform used by over one million developers, without being constrained by their existing infrastructure.

September 27, 2023

Kong announced full support for Kong Mesh in Konnect, making Kong Konnect an API lifecycle management platform with built-in support for Kong Gateway Enterprise, Kong Ingress Controller and Kong Mesh via a SaaS control plane.

September 27, 2023

Vultr announced the launch of the Vultr GPU Stack and Container Registry to enable global enterprises and digital startups alike to build, test and operationalize artificial intelligence (AI) models at scale — across any region on the globe. \

September 27, 2023

Salt Security expanded its partnership with CrowdStrike by integrating the Salt Security API Protection Platform with the CrowdStrike Falcon® Platform.

September 26, 2023

Progress announced a partnership with Software Improvement Group (SIG), an independent technology and advisory firm for software quality, security and improvement, to help ensure the long-term maintainability and modernization of business-critical applications built on the Progress® OpenEdge® platform.

September 26, 2023

Solace announced a new version of its Solace Event Portal solution that gives organizations with Apache Kafka deployments better visibility into, and control over, their Kafka event streams, brokers and associated assets.

September 26, 2023

Reply launched a proprietary framework for generative AI-based software development, KICODE Reply.

September 26, 2023

Harness announced the industry-wide Engineering Excellence Collective™, an engineering leadership community.

September 25, 2023

Harness announced four new product modules on the Harness platform.

September 25, 2023

Sylabs announced the release of SingularityCE 4.0.

September 25, 2023

Timescale announced the launch of Timescale Vector, enabling developers to build production AI applications at scale with PostgreSQL.

September 21, 2023

Red Hat and Oracle announced the expansion of their alliance to offer customers a greater choice in deploying applications on Oracle Cloud Infrastructure (OCI). As part of the expanded collaboration, Red Hat OpenShift, the industry’s leading hybrid cloud application platform powered by Kubernetes for architecting, building, and deploying cloud-native applications, will be supported and certified to run on OCI.